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Lake Victoria Gold Ltd. (TSX-V: LVG; FRA: E1K) has received final approval from the Toronto Stock Exchange to acquire the Imwelo Gold Project in Tanzania. This concludes a complex transaction that the company had already announced in August 2023. Through the purchase of Imwelo, the seller, Tanzoz Mineral Limited, becomes a new >10% shareholder of Lake Victoria Gold. Likewise, Rostam Aziz, one of Tanzania’s wealthiest entrepreneurs, will now hold more than 10% of Lake Victoria. Imwelo’s underlying mining license, ML 538/2015, will irrevocably become the property of Lake Victoria Gold’s wholly-owned subsidiary, Tembo Gold Tanzania Limited. Under the terms of the License Purchase Agreement, the vendor, Tanzoz Mineral Limited, will receive a payment of C$5,500,000 in the form of 24,064,723 common shares in Lake Victoria Gold, at a deemed issue price of C$0.22 per share. In addition, a one-time payment of US$148,148 is due in cash. As a result of the acquisition, Seth Dickinson, the CEO of the seller, was appointed Chief Operating Officer and Director of the company.

The Lake Victoria shares issued to the seller are subject to a trust agreement under the conditions listed below:

• 1/3 of the shares will be released from the trust once commercial production has been achieved at the Imwelo project;
• 1/3 of the shares (1/2 of the remaining shares) will be released 6 months after commercial production has been achieved in the Imwelo project; and
• 1/3 of the shares (all remaining shares) will be released 12 months after commercial production has been achieved in the Imwelo project.

If commercial production is not achieved at the Imwelo Project within three years from closing of the Acquisition, the remaining Escrowed Shares shall be released to the Vendor. During the Escrow Period, the Company will retain voting rights over the Escrowed Shares pursuant to the terms of a voting rights agreement entered into with the Vendor.

Taifa acquires >10 percent of Lake Victoria – placement of shares at CAD 0.22 raises CAD 3.5 million

At the same time as the acquisition was concluded, the company also concluded a private placement of 16,000,000 shares at a price of CAD 0.22 with an associated company of the Tanzanian Taifa Mining and Civils Limited. Taifa therefore now owns 10.86% of the company. Lake Victoria will receive proceeds of CAD 3,520,000 from the placement. Concurrently, the company entered into a mining services agreement with Taifa. This stipulates that Taifa will provide mining services on the company’s properties. The Company has also entered into an investor rights agreement with the subscriber pursuant to which the subscriber will have the right to participate in subsequent financings of the Company in order to maintain its ownership position. In addition, Mr. Rostam Aziz, the owner of Taifa, will have the right to nominate a member of the board of directors of the Company so long as he owns, controls or exercises control or direction over more than 10% of the outstanding shares.

Taifa, a company controlled by Rostam Aziz, had previously signed a binding letter of intent with Lake Victoria in August 2023, in which Taifa agreed to a financing commitment totaling C$11,520,000, to be completed in three phases. The current private placement represents only the first phase. Mr. Aziz intends to acquire additional securities in the Company pursuant to the Commitment.

Simon Benstead, Executive Chairman & CFO, said: “This milestone represents a defining moment for Lake Victoria Gold and its shareholders. The completion of the acquisition of the Imwelo Mining License and the solidification of our strategic partnership with Taifa Group reflects the unwavering commitment and persistence of our team and partners. We thank our shareholders for their patience and support and remain focused on advancing the project to realize meaningful results and value for all stakeholders.”

Conclusion

It took Lake Victoria Gold almost a year and a half to clear all government hurdles and meet all stock exchange requirements for the acquisition of Imwelo. This was a tough test for shareholders. But who wants to look back now? With the stock exchange’s approval, the last uncertainty has been removed and the company can finally look ahead. All parties involved, the seller and the future mining partner, Taifa, have stuck to the original agreement, regardless of the length of the transaction, and accepted the agreed CAD 0.22 per share as the basis for the transaction – even though the price is lower today. In other respects, the delay has not only been disadvantageous for Lake Victoria. The gold price today is almost USD 1,000 higher than in August 2023! This means that the conditions for financing the turnkey Imwelo mine are now much better. Lake Victoria is now receiving significantly more capital for the gold loan of 6,000 ounces targeted with Monetary Metals. The quality of Lake Victoria is reflected not least in its shareholders: Barrick and one of Tanzania’s richest men, Rostam Aziz, are among them, with the latter having already promised to continue his financial involvement. Looking at Lake Victoria’s current shareholder structure, it is more reminiscent of a private company that is largely owned by stakeholders. The big distribution to stock market investors – shareholders – is yet to come.

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